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Monday, April 24, 2006

Monday Morning Musings

I have been experiencing some technical problems with Blogger, which is why I haven't posted that much lately. Hopefully, it will start running smooth again today.

Morning News of Note:

CME: Futures Shock It is hard to take your eyes off that stock flirting with $500 a share whose company is printing money based on what its backers call a "new paradigm." We're talking about shares of Chicago Mercantile Exchange Holdings Inc., of course. The big futures exchange -- where companies and investors buy and sell bets on the future value of a range of items such as stocks and bonds and lumber and even butter -- is slated to report its earnings tomorrow (Full Story) WSJ

NWS: For MySpace, Making Friends Was Easy. Big Profit Is Tougher. ALMOST on a lark, Chris DeWolfe bought the Internet address MySpace.com in 2002, figuring that it might be useful someday. At first, he used the site to peddle a motorized contraption, made in China and called an E-scooter, for $99. Selling products online comes naturally to him. Having jumped into the Internet business in the early days, Mr. DeWolfe had become a master of the aggressive forms of online marketing, including e-mail messages and pop-up advertising. After the Internet bubble burst, he even built a site that let people download computer cursors in the form of waving flags; the trick was that they also downloaded software that would monitor their Internet movements and show them pop-up ads. (Full Story) NY Times

MOT: Digitimes reports Motorola recaptured the No. 1 spot in Taiwan handset sales with a 0.1% lead on Nokia in March, after sitting at number two for six consecutive months, according to estimates made by the local channel. According to the estimates, Motorola captured 25.5% of the 595,000 handsets sold in Taiwan during the month. The total shipments were down 13% sequentially and down 10% on-year, according to the channel.

TWX: According to thebusinessonline.com, John Malone's Liberty Life has swapped almost his entire 4% stake worth $3 bln in American media giant Time Warner in return for ownership of the Atlanta Braves baseball team, some cash, and a 50% holding in American cable network Court TV. The deal is expected to be announced this week. Malone and Time Warner have been in talks for weeks over how to unwind Liberty Life's stake in Time Warner in a way that minimises tax liabilities for Malone.

Mad Money Summary: Jim Cramer opened his show discussing the visit of Chinese president Hu Jintao, saying the best defense play against possible military threats from countries like China, and the war in Iraq, is General Dynamics (GD). Cramer then said he would consider buying AAR (AIR), a company which does maintenance and repairs for the airlines. Then Cramer recommended Pharmaceutical Product Development (PPDI), a best-of-breed company for clinical trials, after reading a New York Times article about a drug test in Britain that almost killed six people. Cramer then discussed Royal Caribbean (RCL), which he used to believe should trade at a discount to rival Carnival (CCL), but after seeing Royal Caribbean's results this quarter, he has changed his mind. In the "Lightning Round," Cramer was bullish on Goldcorp (GG), Cephalon (CEPH), Crystallex International (KRY), Yahoo! (YHOO), Matsushita (MC), Corning (GLW) and UnitedHealth Group (UNH), and was bearish on Tanzanian Royalty Exploration (TRE), Deckers Outdoor (DECK), MedImmune (MEDI), Pozen (POZN), International DisplayWorks (IDWK), Jabil Circuit (JBL), Zoltek Companies (ZOLT), Travelzoo (TZOO) and Bowater (BOW).

Market Comments: The market opens under continued selling pressure, after closing weak at the end of the day on Friday. Higher gas prices are getting a lot of press today, while oil is trading lower. The dollar continues its slide today, hitting a 7-month low. And bond yields are down below 5.0%.

The Nasdaq is seeing the most pressure, with the semi group down over 1.0%. Brokers are also seeing some profit taking, which is normal after the run they've had. And most energy stocks are seeing some profit taking as well, after being up big on Friday.

Earnings season continues in full force this week, so expect more volatility surrounding specific reports. We will also get a peek at 1Q GDP, which should show a sharp rebound.

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About Me

Jordan Kahn, CFA is the Chief Investment Officer of KAM Advisors, in Beverly Hills, CA.
He is a frequent market commentator for numerous investment publications, and has appeared on CNBC and KNBC-Los Angeles. He is a regular columnist for RealMoney.com and has also been featured in TheStreet.com, Street Insight, Technology Investor, and Barron’s.